RBC Bearings Inc. (NASDAQ:ROLL) Q2 2020 Earnings Conference Call - Final Transcript

Nov 01, 2019 • 11:00 am ET


RBC Bearings Inc. (NASDAQ:ROLL) Q2 2020 Earnings Conference Call - Final Transcript


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Good day ladies and gentlemen and welcome to the RBC Bearings Fiscal 2020 Second Quarter Earnings Conference Call. [Operator Instructions]. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

I would now like to turn the conference over to your host Mr. Chris Donovan with Alpha IR. Sir please go ahead.

Chris Donovan

Good morning and thank you for joining us for RBC Bearings fiscal 2020 second quarter earnings conference call. With me on the call today are Dr. Michael J. Hartnett Chairman President and Chief Executive Officer; and Daniel A. Bergeron Vice President Chief Financial Officer and Chief Operating Officer. Before beginning today's call, let me remind you that some of the statements made today will be forward-looking and are made under the Private Securities Litigation Act -- Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to RBC Bearings' recent filings with the SEC for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. These factors are also described in greater detail in the press release and on the company's website.

Now I'll turn the call over to Dr. Hartnett.

Michael Hartnett

Thank you and good morning. Net sales for the second quarter of fiscal 2020 were $181.9 million versus $172.9 million for the same period last year, a 5.2% increase. Organic growth for the quarter was 6.8%. For the second fiscal quarter of 2020, sales of industrial products represented 35.5% of our net sales with aerospace products at 64.5%. Gross margin for the quarter was $71.1 million or 39.1% of net sales. This compares to $67.8 million or 39.2% for the same period last year, a 4.9% increase. Operating income was $37.3 million versus $35.9 million last year, a 4% increase. EBITDA $51.2 million versus -- a 7.7% increase over last year. We're pleased with the performance this quarter and continue to be encouraged with the strong outlook of our aircraft businesses and are seeing green shoots in the -- as early as the fourth quarter in some of our industrial markets. Sales of industrial products over the period were down 5% last year the expansion was 7% so we were up against some difficult comps. Industrial OEM was down 4% and distribution in after market was down and organic 7.2% on a year-over-year basis. Aerospace and defense markets paint the opposite picture. The second quarter organic net sales were up 14.4% aerospace and industrial markets today are night and day. Aerospace sales were driven by OEM and aftermarket. Aero and defense OEM were up 15.1% on an organic basis. Supply chain constraints internal and external continued to ease as we bring new capacity and approvals online.

Some plants continue to be production-constrained, and we will continue to add capacity in these areas. This sector will likely continue to perform at the double-digit growth level for the next several quarters as we